Privatization of TAP? “I think this time it’s for good”

O minister of Infrastructure and Housing, Miguel Pinto Luz, assures that TAP will be privatized, stressing that “there is a large majority that advocates privatization”.

“I think this time it’s for good”, started by ensuring, in an interview with CNN Portugal. “The government was mandated by a decree that had parliamentary scrutiny, which was validated in Parliament. And so the Socialist Party said, openly and vocally, that it was available for a privatisation of 49.9% and the Aquis also did so. There is a large majority who advocate privatisation of 49.9%, and we are carrying out that mandate.”

According to the minister, “the drama of the urgency of TAP’s privatisation is related to the state’s ability to inject as a shareholder capital into the company.”.

“ Here we are talking about the shareholder state of a company to which you cannot be called to help at any time of crisis because state aid does not exist. And TAP isn't immune to any adversity in the next few years. And this is the drama ", explained.

The governor assured that there is no “ideological obligation” to privatize TAP, but ensured that the airline is “better managed by private individuals”.

Assuming that it is necessary to ensure “all strategic interests for the country”, Pinto Luz ensured he was aware that the airline “is not immune to future crises and what happened in the pandemic is paradigmatic of what can happen – hopefully not – in the coming years.”.

Asked about how the government will guarantee these strategic interests, the minister first recalled that, for now, the state remains a majority shareholder and has more than 50% of the Board of Directors, and “these decisions are part of the strict powers of the Board of Directors and not of the Executive Board”.

“ The Portuguese are safeguarded in the first phase ", explained.

Underlining that Lufthansa and Air France-KLM presented similar solutions for the 100% path, Pinto Luz ensures that, at this stage, Lufthansa “showed the desire that the Portuguese State also have a place in the supervisory board of holding in Germany; the assignment of an executive place in Portugal and – this is very important – the creation of a Portuguese supervisory board only to monitor these strategic issues”.

“Lufthansa delegates in this supervisory board the relationship of all these strategic issues, maintaining – despite TAP, at that time hypothetically already being 100% of the group – these strategic skills (hub, routes, links to the islands, PALOP...),” she explained. 

Ensuring that, by itself, it would advance towards the privatization of the airline at 100%, Miguel Pinto Luz clarifies that the government, having no absolute majority, did not find “democratic attraction in Parliament to be able to advance to 100%”.

Stressing that, with the last three leaders, the Socialist Party has had three different positions on this portfolio in the last three years, “this is relevant to the discussion we need now for the second phase,” the Minister points out, referring to the Prime Minister the decision on whether to include the PS in this discussion.

Miguel Pinto Luz states that, on the side of the CDS, there is support to advance to this second phase, ensuring that AD is “united”.

Faced with the current links of Lufthansa and TAP and asked whether the company's interest will not be Latin America and not Lisbon, the minister was taxing: “No, because these routes are Lisbon routes and, in the aerospace sector, I cannot change routes as I want. Lufthansa cannot take this Lisbon-Recife route and put it from Frankfurt-Recife and this is the confusion that is often seen in the discussion.”

“Lufthansa – and well – has 20% of the market share in Latin America”, compared to the current 9%.

It is recalled that the Government selected Lufthansa this Wednesday for the partial privatisation of TAP, with a proposal of EUR 1,201 million for up to 49.9% of the capital, intending to complete the operation by the beginning of 2028, the Prime Minister, Luís Montenegro, announced at a press conference.